UK Modernising payment services regulation

HM Treasury (HMT) has published a consultation on modernising the UK's payment services and electronic money regulatory framework. Given the pace of innovation in new technologies, the government wants to ensure the existing framework under the Payment Services Regulations 2017 (PSRs) and Electronic Money Regulations 2011 (EMRs) can facilitate new forms of payment safely and securely. The Cross Border Payments Regulation and the SEPA Regulation are also within scope of the reforms while the Interchange Fee Regulation 2015 and the Payment Card Interchange Fee Regulations 2015 are out of scope, reflecting ongoing work on card fees.

The consultation considers updates to the PSRs and EMRs, including the extent to which responsibility for setting firm-facing requirements should be delegated to the UK Financial Conduct Authority (FCA). Having found that strong customer authentication standards (SCA), while reducing fraud, created burdensome customer friction, the government has already committed to revoking the SCA-related authentication provisions in the PSRs so that the FCA can adopt more outcomes-based authentication rules. The consultation also sets out the government's approach to the long-term regulatory framework for open banking.

The deadline for responses is 6 October.

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